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No they should not. Stock buybacks of such recklessness were not even legal until Reagan - for this exact reason. It's not good business when your stock is grow

No they should not. Stock buybacks of such recklessness were not even legal until Reagan - for this exact reason. It's not good business when your stock is growing and your company is dying. In fact, it's just an accounting trick which is essentially vulture capitalism - but from the inside. https://www.cnn.com/2023/04/25/business/bed-bath-beyond-share-repurchases/index.html https://www.cnn.com/2023/04/25/business/bed-bath-beyond-shar... "The $11.8 billion Bed Bath & Beyond spent on its own stock since 2004 comes to more than twice the $5.2 billion in debt it had on its books in its most recent SEC filing, a debt load that proved crushing for the company. It left the company unable to buy the inventory required to create the sales it needed to reverse losses. “The company’s stewardship of their capital failed,” said Declan Gargan, retail director and credit analyst who follows Bed Bath & Beyond for S&P Global Ratings."

nradov 3y ago
Nonsense. If the shareholders prefer to take capital out instead of reinvesting in the business there's nothing wrong with that. And if businesses sometimes die as a consequence then so what. Individual businesses have no particular right to exist indefinitely. The only reason that companies use stock buy backs instead of dividends to return capital to shareholders is double taxation. If Congress eliminated the double taxation then there would be little reason for stock buy backs.
- renegade-otter 3y ago
  Thank you for defining "broken capitalism".
  - nradov 3y ago
    Snarky complaints are cheap. What are you proposing exactly? Should people donate their capital to businesses and expect nothing in return? Should all businesses continue operating forever?
    - renegade-otter 3y ago
      Again. This is why this used to be illegal. Why should the new shareholders have the right to destroy something others spent decades building? A successful company constantly provides sustainable returns, then a group comes in and says "that's enough, let's milk this cow until it dies. Thanks for doing the hard work! Also, to the shareholders that got screwed as the company stock crashes finally - too bad, play again".
      - nradov 3y ago
        When you own something that means you have the right to do pretty much whatever you want with it. That is the fundamental social contract with private property. If I want to buy a bunch of diamonds and smash them with a hammer then I can do that, regardless of whether you think it's a good idea. Businesses fail for all sorts of reasons. Sometimes they get too aggressive with the capital structure and blow up. This is a feature, not a bug. While the experience may be painful for some stakeholders in the short term, over the long term this creative destruction unlocks latent value and increases economic growth. And if old shareholders want to prevent new shareholders from having the ability to destroy the company then that's easily accomplished. Just establish separate share classes with different voting rights. Many companies already do this.

nradov 3y ago

Nonsense. If the shareholders prefer to take capital out instead of reinvesting in the business there's nothing wrong with that. And if businesses sometimes die as a consequence then so what. Individual businesses have no particular right to exist indefinitely. The only reason that companies use stock buy backs instead of dividends to return capital to shareholders is double taxation. If Congress eliminated the double taxation then there would be little reason for stock buy backs.

renegade-otter 3y ago
Thank you for defining "broken capitalism".
- nradov 3y ago
  Snarky complaints are cheap. What are you proposing exactly? Should people donate their capital to businesses and expect nothing in return? Should all businesses continue operating forever?
  - renegade-otter 3y ago
    Again. This is why this used to be illegal. Why should the new shareholders have the right to destroy something others spent decades building? A successful company constantly provides sustainable returns, then a group comes in and says "that's enough, let's milk this cow until it dies. Thanks for doing the hard work! Also, to the shareholders that got screwed as the company stock crashes finally - too bad, play again".
    - nradov 3y ago
      When you own something that means you have the right to do pretty much whatever you want with it. That is the fundamental social contract with private property. If I want to buy a bunch of diamonds and smash them with a hammer then I can do that, regardless of whether you think it's a good idea. Businesses fail for all sorts of reasons. Sometimes they get too aggressive with the capital structure and blow up. This is a feature, not a bug. While the experience may be painful for some stakeholders in the short term, over the long term this creative destruction unlocks latent value and increases economic growth. And if old shareholders want to prevent new shareholders from having the ability to destroy the company then that's easily accomplished. Just establish separate share classes with different voting rights. Many companies already do this.